Pancreas development involves a coordinated process in which an early phase of cell segregation is followed by a longer phase of lineage restriction, expansion, and tissue remodeling. By combining clonal tracing and whole-mount reconstruction with proliferation kinetics and single-cell transcriptional profiling, we define the functional basis of pancreas morphogenesis. We show that the large-scale organization of mouse pancreas can be traced to the activity of self-renewing precursors positioned at the termini of growing ducts, which act collectively to drive serial rounds of stochastic ductal bifurcation balanced by termination. During this phase of branching morphogenesis, multipotent precursors become progressively fate-restricted, giving rise to self-renewing acinar-committed precursors that are conveyed with growing ducts, as well as ductal progenitors that expand the trailing ducts and give rise to delaminating endocrine cells. These findings define quantitatively how the functional behavior and lineage progression of precursor pools determine the large-scale patterning of pancreatic sub-compartments.